Warren Buffett Reflects on Berkshire Hathaway’s Performance in 2024 Annual Letter
In his 2024 annual letter to Berkshire Hathaway shareholders, CEO Warren Buffett discussed the conglomerate’s record operating earnings of $47.4 billion, despite 53% of its 189 operating businesses reporting a decline in earnings. Buffett attributed the company’s success to a significant gain in investment income, driven by improved Treasury Bill yields and increased holdings of these short-term securities. Berkshire’s cash and cash-like securities stood at $334.2 billion at year-end, nearly double the amount from the previous year.
Buffett defended Berkshire’s growing cash pile, emphasizing that the majority of shareholders’ money remains invested in equities. He reassured shareholders that Berkshire will continue to deploy a substantial majority of their money in equities, primarily American equities with significant international operations. Berkshire’s total revenues for 2024 reached $371.4 billion, up from $364.5 billion in 2023, while investment gains totaled $41.6 billion, down from $58.9 billion the prior year.
Reflecting on past mistakes, Buffett acknowledged errors in assessing the future economics of businesses and the abilities of managers hired by Berkshire. He noted that during the 2019-23 period, he had used the words “mistake” or “error” 16 times in his letters to shareholders, a transparency that sets Berkshire apart from many other large companies. Buffett also mentioned that Greg Abel, his heir apparent, will soon take over as CEO and continue the tradition of honest reporting to shareholders.
Buffett highlighted Berkshire’s tax contributions, noting that the company paid $26.8 billion in taxes in 2024, the most any individual company has ever paid to the US government. He also praised the “American miracle” of US economic growth, attributing Berkshire’s success to the sustained culture of savings and the magic of long-term compounding.
The annual meeting, set for May 3, will feature a somewhat changed schedule, with the Q&A session starting and ending earlier than in previous years. Buffett will be joined by vice chairmen Greg Abel and Ajit Jain for two-and-a-half hours, followed by a session with only Abel, concluding by 1:00 p.m.
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